115. Holding Too Many Altcoins? Follow This To Know If You Should HOLD or SELL.

Burgs, have you fallen in this trap, mate, of just having way too many alts?

Always. If your altcoin is down 90%, you need a 900% run. What is going to happen in your coin for that 900% run just to get you back to break even? What has to be true and it is not market tailwinds. Is it your ego driving this because you want to be right? Why are you still holding this and you haven't sold it? Your identity attached to it and investing all that stuff does not matter. Sell it, cop the loss, carry that loss forward and put it into something that has a better chance of getting to that 900%.

Welcome to the Bennetbergs podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift alongside Mears Bergs, your favorite MBA and CEO of Collective Shift, Australia's leading crypto portfolio insights company providing professional analysis and portfolio strategies for crypto investors. Like you. We are a unique blend of the established and the self made and we're here to break down crypto business and personal growth. But we're not here just to talk crap. We're giving you the insights you need to make better investments, build successful businesses and level up your life. And today we're talking about how to reassess your altcoin portfolio. Are you stuck holding an absolute bucket load of cryptocurrencies trying to figure out what to do with them? Are you holding them hoping they're going to reclaim their all time highs and they're down 95%? Have you been chasing different coins over the last three or four years? Have influencers telling you it's the new Ethereum killer, but they're just lying to you to make money from you. It's a common mistake we see. And not knowing what to buy and what to sell can create this analysis paralysis and we, we definitely know where you sit. So today we're going to be going through why this is such a common problem and how to actually analyze your altcoin portfolios to understand which ones you should hold, which ones you should which ones you should sell. Sorry. And heading into 2024 you really want to get this in order to, to really nail this next cycle. Bergs, have you fallen this trap mate, of just having way too many alts always.

And everyone out there. You're listening to Ben and Bergs. I know you got some crypto. I know you're holding too many altcoins. You got those leftover stragglers from the ICO days. You got all these like dodgy NFTs that you picked up, you got the next Ethereum killer in there, you got into some Pepe coin, you're holding a bit of Doge. You need to question and be like, hey, these guys are talking about this here right now. This is the episode to sort your life out. We're coming up to a bull run. There's going to be a halving next year. We know what's going to happen. There's a lot of activity, ETFs are on the way, things are happening. Now is the time to sort your portfolio out, sort your life out, get good and actually profit from this bull run.

Could have said a bit of myself burks. And that question you really want to ask yourself heading into next year is why am I holding this? If you can ask yourself that and answer that question in a good way, that's probably a good starting point. But to first really get into this, really need to understand, well, how many altcoins is too many? And you know, it's different for different people. But one thing that we recommend doing is plugging in. If you're a collectorship member, plugging in, plug in all the altcoins you have and all the assets you have in our dashboard to get a bit of an overview perspective of your crypto portfolio.

What we sort of recommend, usually for long term investors that, you know, holding altcoins should be somewhere between 0.5% to 3% of your entire portfolio like per individual altcoin. And then you want to really look at, you know, Bitcoin and Ethereum, you know, being the, the large majority. But to really dive in and, and understand how many we kind of, what I tend to say to people is you should have.

You should have the amount of altcoins in your portfolio that you are comfortably able to track and stay across. So for me I only have two altcoins and I'm full time in this space. Reason I have two is because I know exactly what the two projects are up to, what their roadmap is and I know if they're achieving it and they're building towards the future they're trying to build. If you have 20, 30, 50 and you have a full time job, trying to stay on top of them all is probably going to be next to impossible. And that makes it very difficult to sell because you don't know when to sell these assets when it's oversold or maybe they're not actually delivering on what they're, you know, setting out to achieve. So it's a personal question, but start with why exactly do I hold this and do I have a good firm grasp of all the assets in my portfolio?

Yeah. If you're opening up your portfolio on Collective Shift or whatever app that you use and you're scrolling and scrolling and scrolling, this is for you. And to sum up what Ben said, that the majority of holdings, BTC and ETH and altcoins are lesser holding. And so let's just say, let's imagine it's 10% for you for altcoins, no more than 0.5% of your total portfolio. 0.5 to 3% for an altcoin. So if you're going 3% per altcoin and you got a 10% allocation, that's three altcoins, that's where you live.

Yeah, really good point. Burgs. And you're going to have altcoins that are going to grow obviously in a bull market, which is absolutely fine. Now you can either, you know, try and reallocate those or you can just sit and hold onto them. So a couple of mine that, you know, perform really well over the last three or four months, I'm holding on. But you can rebalance and reorganize as the market goes on.

Now this is important too. So this is why we say do it on the Collective Shift platform because it gives you a pie chart. And as those altcoins balloon from 1% of your portfolio to 20%, it'll show you that and it will also show you the categories that you're allocated in so you're able to make those decisions. Do I rebalance or has this got legs and it's going to go further or do I sell down slightly?

Yeah, a hundred percent. So the next bit is a, is a bit of a five step process that you can undertake to address whether or not you should sell or hold your altcoins. Now you really want to try and be objective as possible and remove your bias entirely, really remove the emotion because that's going to help you make the tough calls. So number one, to review these old coins, you want to look at the fundamentals. You want to go through each of your coins and look at are they still building? You know, how's their timing? Do they still need time to grow their project? Do they actually have a willing market that's ready to buy? Do they have a community of developers and a growing ecosystem? Do they have active social media? Have they gained legitimate adoption or is it just all hyper nonsense? Have they been surpassed by competitors? Are there better Projects that have gone past them, do they have sufficient Runway? I. Do they have enough money left? Are the token economics actually good or are they just nonsense and, you know, filling up the coffers of the founders? Do they have an outdated or redundant narrative? Do we think this narrative is dead? Do we think it's not really going to come back in waves in the future years? And is there any upcoming catalyst that could spark price to come back? So these are some things you can ask yourself from a fundamental level. Go through your tokens and ask yourselves and look at each of the tokens to answer whether or not these fundamental things are in the good side or the bad side. To hold your token.

Absolutely, man. And you need, we've literally got in this article a tick sheet against it. Do you have this or not? And it'll help you to go down on a little tick sheet and make that decision for you. Because if you start to see that clearly and hey, a lot of these things aren't adding up, they haven't executed or this is opaque and I don't know where they're going, that can then inform your decision.

Brilliant. Now the next one is, are you emotionally attached to your coin? Now, we're all in somewhat emotional to add coins, but some more than others, right? And it's really imperative to separate that emotion to make rational decisions. Now this is a really interesting, you know, chart here that we put in this article, which is how much your token needs to increase to get back to break even if the altcoin is down in price. Right. If your coin is down 20%, it actually needs to increase by 25% to get back to break even. If your coin is down 50%, it's going to take 100% growth to get it back to break even. Now this is where it really compounds beyond 50%. If your coin gets down near that 90% downwards mark, right. Your coin needs to increase a staggering 900% to get back to break even. Right? So that's a long way from the top. So understand that if your coins are holding a 70% plus loss, your coins need to increase a minimum of 233% to get back to break even.

Right? Let's look at that. If your altcoin is down 90%, you need a 900% run. What is going to happen in your coin for that 900% run just to get you back to break even. What has to be true and it is not market tailwinds. There needs to be something amazing with that coin. First of all, recognize that.

Second.

And this is especially true for me. Is it your ego driving this because you want to be right? Why are you still holding this and you haven't sold it or is your identity attached to it? So are you an ambassador for this project? Are you in their discord? Do you have status there? You know, what is it that is driving you? And investing all that stuff does not matter. Sell it, cop the loss, carry that loss forward and put it into something that has a better chance of getting to that 900% than that coin. And I think just by talking about those things and the effort you put in, that really goes to point number three, Ben.

Yeah. And that is the sunk cost fallacy. So spot on. Bergs. You know, I love this. The market does not care about you or anyone about how much money you've poured in the hours of research or that you've held at a loss. The market is the market. So the opportunity cost of you continuing to hold this asset versus seeing a higher profitability on upside on another coin is the opportunity cost of you not selling. So there could be a greater opportunity cost of you not realizing those losses and using that time and attention and capital to look at another coin that ticks all the boxes in the fundamental analysis we've just done that is magical. Like everyone needs to be thinking about that across all their coins and not thinking about, just because I've held something for so long doesn't mean I shouldn't sell and rotate into another coin.

Part of this sunk cost fallacy. You don't need to hold on to these projects. You don't need to be right. You don't need to turn things around. You don't need to get involved in the project. You just need to make money. Your job as an investor is to make money, see that crypto go up, sell it into whatever currency you have and use that money for life fulfillment to make your life better. You can write that off. You can carry the loss forward and invest in something that has a better opportunity of making money. What you thought was true two years ago might not be true now. Landscape might have changed, legislation might have changed, the team might have changed, they might not be executing. But that's okay. Let it go. This is the price you pay for investing. You're not going to get it right all the time. The best time was to let that go two years ago. The second best time is now. Reassess, let it go and put your money into something that will give you a better return.

Brilliant. Number four, consult your tax professional this is one that's often overlooked because what you can actually do, depending on where you live, is tax lost harvest your cryptocurrencies that you no longer want to hold. So again, we emphasize that you go and check out depending on where you are in the world and chat to your financial advisor and tax accountants. But you can basically, in some jurisdiction, jurisdictions, you can claim the loss of that investments that you've made to offset any future capital gains. So not only do you have the opportunity cost, but you've also got that potential to lock in that loss to offset that new investment that hopefully is going to go up in price.

Yeah, this is a huge thing. So consult your tax professional. And in Australia, if you have a capital loss, you can carry that forward in perpetuity. So it's not just for that year for those gains to offset them. That's a huge thing. Lost harvesting is huge where if you've got something that's not performing, you can sell it. There are rules around it if you want to buy that back and time periods, please, please, please speak to your accountant. But accountants do not cost that much in terms of what they will actually save you. And in terms of putting your crypto into different tax structures, have that conversation. Are you classified as an investor or a trader? Your accountant will help you with all of that. And again, we recommend Adrian from Crypto Tax Australia. He does both my tax and Ben. So we know that he is good and he's done a lot of webinars with us and he has a lot of satisfied customers. He is cheap compared to what you actually get.

Yeah, spot on. Definitely speak to one of those. Like one of these guys can just give you so much insights and information you probably don't already have. And the last but not least is consolidate and prepare. So once you've reviewed all your cryptocurrencies, you've gone through the fundamentals, you might found that you're holding too many cryptocurrencies you cannot say across. In our experience, it's better to stay across just a few things than trying to like, you know, fumble your way through of holding way too many and spreading yourself too thin, trying to hopelessly capture every new narrative and trend. It's not possible. You're not going to be able to cover everything. So have a plan. Reduce the number of tokens, reduce the, the amount of space that's in your mind and time and wallet refocus, have conviction and back yourself on those assets you have. And if you haven't already, we highly recommend going on to our website and helping you so and create your own personal crypto strategy which we can help you through our resource online. So you can head over to Collective Shift, go to the Research tab, scroll to the bottom and there is the strategy document at the bottom there you can print out, fill out and have your strategy document in order.

That's awesome Ben. And look, just to recap, the five things to do at is look at the fundamentals of your project. Have that tick sheet look at Are you too emotionally attached? Consider the sunk cost fallacy. Consult your tax professional and consolidate and prepare.

Amazing. Great work Bugs. Good session. Hopefully that's going to help people reallocate those old coins. Consolidate and nail this upcoming year. If you like this episode, we'd love for you to share it with a friend. If you know someone that holds way too many old coins and just keeps following all their favorite influencers buying more and more and more, please send this to them. We hope to help them out on this upcoming cycle. Thank you everyone for tuning in and we'll see you on the next episode.

Thanks champions.